Foreclosures up 400 percent in Victorville

Tuesday

Jul 22, 2008 at 1:27 PMJul 22, 2008 at 1:33 PM

ASSOCIATED PRESS

A record number of California homeowners defaulted on mortgages last quarter, a real estate information service reported today.

Mortgage servicers recorded "notices of default" on 118,020 homes from April to June, up 125 percent from the same period in 2007, according to DataQuick Information Systems. That total was the highest since the firm began recording foreclosure statistics in 1992.

The Victor Valley hit especially hard with a hike up 400 percent in parts of Victorville and Wrightwood.

Most of those homeowners will likely have their homes repossessed, likely prolonging the current foreclosure crisis.

The pace of defaults slowed in the second quarter, however, with the total rising 6.6 percent from the first three months of the year. By contrast, first-quarter foreclosures had shot up 39 percent from the last quarter of 2007.

DataQuick president John Walsh said the relatively small quarterly increase may show "some lenders are starting to prioritize workouts with homeowners instead of grinding things through the foreclosure process," but also noted banks "may just be swamped and can't handle processing any paperwork."

Notices of default mark the first stage of the foreclosure process, when a borrower misses several monthly payments. If the borrower is unable to work out an agreement with the lender, the home is foreclosed.

DataQuick estimates 78 percent of homeowners in default eventually are foreclosed, compared with 52 percent last year.

The second-quarter default figures were a record high for all but a few of the state's 58 counties, including Los Angeles County.

Foreclosed houses accounted for 40 percent of homes re-sold in California from April to June, up from 5.4 percent a year ago. The percentage varies widely across the state. Foreclosures accounted for only 3 percent of home resales in San Francisco County, but made up 75 percent of resales in Merced County.

Most of the loans that went into default last quarter were originated in 2005 or 2006. During that period, home prices "went too high, fueled by the availability of dicey home loans. An added element was speculative buying," Walsh said.